Stablecoin Market Cap – The 'Oxygen Tank' for the BTC Pump

Observing the Stablecoin Market Cap chart, we see the two main players, USDT and USDC, continuously injecting more liquidity.

USDT surged from ~20 billion USD (early 2023) to nearly 100 billion currently.

USDC increased from ~10 billion to about 40 billion.

Meanwhile, DAI and FDUSD linger around a few billion, not significant enough to make an impact.

At the same time, BTC price (gold line) skyrocketed from 28k USD in mid-2024 to above 110k currently. This correlation is not coincidental: stablecoins are the 'oxygen tank' that provide margin and spot liquidity, helping the massive pump to have more sustained strength.

What I noticed

Capital growth rate: USDT and USDC set new benchmarks each month, indicating that institutional and retail capital flows into the crypto space are ongoing. When the stablecoin pool is large enough, BTC can easily continue to reach higher price levels.

Opportunities from DAI & FDUSD: Although small, DAI and FDUSD fluctuate around 3–5 billion USD; this is fertile ground for alt stablecoins or yield farming if you want to diversify liquidity.

Funding volatility: The higher the amount of stablecoins held on exchanges, the more room there is for the perp funding rate to fluctuate between long and short, creating short-term trade opportunities.

Personal strategy

- Persist with DCA BTC: I allocate capital to buy BTC weekly when stablecoin dominance >65% of total crypto capital.

- Capitalize on funding: go long on BTC perps when funding is deeply negative (excess long margin) and vice versa, based on stable liquidity.

- Monitor new stablecoins: watch FDUSD – if it exceeds 5 billion, consider opening additional layer-1 altcoin positions to ride the capital wave.

[Personal analysis, not investment advice.]